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2017 (8) TMI 1598 - AT - Income TaxLong Term Capital Gain, Taxability and Year of Taxability - taxability or assessibility of the income in which year - Determination of cost of acquisition of the rights being transferred - whether the receipts on account of development agreement relating to TDR related FSI is taxable as capital gains or not? - HELD THAT:- We find that this issue has been adjudicated upon by the Hon’ble Bombay High Court in the case of CIT v. Sambhaji Nagar Co-op. Hsg. Society Ltd [2014 (12) TMI 1069 - BOMBAY HIGH COURT]. It is held that the asset i.e. FSI/TDR is generated by change in the development control regulations. A specific insertion would therefore be necessary so as to ascertain its cost for computing the capital gains. The Court, referring to the decision of the Apex Court in CIT v. D. P. Sandu Bros Chembur P Ltd [2005 (1) TMI 13 - SUPREME COURT]held that all which is capable of acquisition at a cost would be included within the provisions pertaining to the head capital gains as opposed to assets in the acquisition of which no cost at all can be conceived. Thus, the Hon’ble Bombay High Court held that since the cost of acquisition of the rights being transferred cannot be determined, the amount is not liable to capital gains tax. We respectfully following Hon’ble Bombay High Court in the case of Sambhaji Nagar Co-op. Hsg. Society Ltd (supra) hold that consideration received for permitting the developer to use TDR/FSI rights on the land belonging to the assessee is not taxable as capital gains. Accordingly, we allowed the issue of assessee appeals in both the years. However, in the given facts and circumstances, we are of the view that assessibility of these receipts falls in AY 2004-05 and not in AY 2002-03. Accordingly, both the appeals of the assessee are allowed.
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